Greek crisis: discussion

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Jacob Richter
Greek crisis: discussion

I'm surprised there's no International Politics thread on the Greek crisis, especially after the deaths of three bank workers.

N.Beltov N.Beltov's picture

According to the KKE (the Greek Communist Party), those 3 deaths were the result of the actions of agents provocateurs. There's a link over here. (thread on the Greek crisis).

Rabelais

Do they have proof?

ennir

I've heard from a friend, who has spoken with her family there, that they have shut down all the pharmacies and that this is creating a whole other level of panic for those who need medications. 

Sven Sven's picture

Rabelais wrote:

Do they have proof?

About as much proof (and credibility) as the claim that the Apollo 11 moon landing actually occurred in a secret government film studio.

Jacob Richter

N.Beltov wrote:
According to the KKE (the Greek Communist Party), those 3 deaths were the result of the actions of agents provocateurs. There's a link over here. (thread on the Greek crisis).

That bank workers strike is indicative of overall Greek hostility toward the government.  The KKE has been doing a good job thus far in this unrest.

Snert Snert's picture

Quote:
Do they have proof?

 

Proof denies faith.

Polunatic2

I haven't been following this story too closely but I heard last night that the IMF will be running Greece's economy as a condition for the bailout. The shape of things to come? So much for democracy.

Snert Snert's picture

Somehow I doubt that Greece's constitution would allow the government to step aside and turn financial control of the nation over to a third party.  I'm guessing that "running Greece's economy" is just hyperbole for "ensuring Greece collects taxes and doesn't piss all its money away".

thanks

"7. a very critical note: describing the period of the 1930's as an era, above all, of great "social prosperity" in the former Soviet Union without making reference to the Stalinist excesses and crimes and show trials, etc. , casts a dark cloud over this overwise interesting piece. We all know that capitalism was undergoing a profound crisis at the time but this hardly merits sweeping such crimes under the rug. Gah."

-from the earlier babble thread on Greek Austerity, a comment i was greatful for in a critique of a KKE article.

I find it very difficult to take the KKE seriously when they are so false regarding the USSR. 

Perhaps if the KKE hear criticism in this regard they can reexamine evidence from the region.

Otherwise they and their other messages are just written off.

 

Unionist

Sven wrote:

Rabelais wrote:

Do they have proof?

About as much proof (and credibility) as the claim that the Apollo 11 moon landing actually occurred in a secret government film studio.

Yeah, next they'll be saying the Nazis burned down the Reichstag.

RosaL

thanks wrote:

"7. a very critical note: describing the period of the 1930's as an era, above all, of great "social prosperity" in the former Soviet Union without making reference to the Stalinist excesses and crimes and show trials, etc. , casts a dark cloud over this overwise interesting piece. We all know that capitalism was undergoing a profound crisis at the time but this hardly merits sweeping such crimes under the rug. Gah."

-from the earlier babble thread on Greek Austerity, a comment i was greatful for in a critique of a KKE article.

I find it very difficult to take the KKE seriously when they are so false regarding the USSR. 

Perhaps if the KKE hear criticism in this regard they can reexamine evidence from the region.

Otherwise they and their other messages are just written off.

Communists get tired of having to repudiate Stalin every time they open their mouths - it can be a distraction from the point they're trying to make. I promise you the KKE has done that on other occasions. I often talk about Christianity without bothering to mention and repudiate the many crimes committed in its name. I certainly do that sometimes but not every time because it can get in the way of what I'm trying to say. I imagine you sometimes talk about Ukraine without including a strong condemnation of anti-semitism and murder of Jews. 

RosaL

Snert wrote:

Somehow I doubt that Greece's constitution would allow the government to step aside and turn financial control of the nation over to a third party.  I'm guessing that "running Greece's economy" is just hyperbole for "ensuring Greece collects taxes and doesn't piss all its money away".

 

ha! Who do you think runs Canada? Frown

thanks

about the Greek crisis,

actually, its not just the Greek crisis.

Harper has just given thirty billion to private bankers. 

This on top of the 200 billion he gave financiers in 2008 through the Bank of Canada.

as many have said, once this public money enters the markets, private bankers game with it.

"The U.S. Federal Reserve and other central banks including the Bank of Canada opened a program to ship U.S. dollars to Europe to further help head off the crisis.

Known as a dollar swap, the program provides funds to foreign private-sector banks to ensure they have enough funds to lend out to customers.

The Bank of Canada arranged for as much as $30 billion from the U.S. central bank if needed, reviving a swap arrangement with the Fed that had been allowed to expire at the start of February."

http://www.cbc.ca/money/story/2010/05/10/markets-euro-greece.html#ixzz0neHZg76m

 

The current trillion dollar public bailout fund is leveraged into thirty trillion or more by global derivatives players, inflating the global money supply.

then interest rates are raised.

the public has to deal with inreased prices for everything, while good jobs are replaced by low wages and instability.

Public services are cut and privatized, crown corporations and resources sold off, to be picked up by private financiers, giving them more to game with in the casino. 

the earth is ruined.  even just a day later, fossil fuel projects go full steam ahead again in the north.

The financial parasites cannot survive without ongoing and increasing public transfusions, and each whimper sends politicians to shovel more to the trough. 

Harper, Obama and the EU don't actually want to rein in global finance.

Another thirty billion !!! i still can't believe it...and no increased transfer payments for health, education, a housing strategy, Indigenous nations...

and Harper lets the Canada Pension Plan sink money into Rockefellers' real estate, to let that corp gamble more in derivatives.

Why doesn't the CPP invest in public bonds for funding fully public services here?  recycle public money and avoid derivatives inflation.

crazy.

 

 

thanks

'great social prosperity' in the USSR !!??  that's not just omitting mention, its sanitizing their own history as the bolsheviks always have.

RosaL

thanks wrote:

'great social prosperity' in the USSR !!??  that's not just omitting mention, its rewriting history as the bolsheviks always have.

Stalin was a criminal. That doesn't mean there was nothing good about the economy of the time. And it's the economy they're talking about - not purges and gulags. 

thanks

um, what part of purges and gulags don't have to do with economy? who does the work? [gulag residents, peasants terrorized by purges] who gets the benefits?  [Party hierarchy].

RosaL

thanks wrote:

um, what part of purges and gulags don't have to do with economy? who does the work? [gulag residents, peasants terrorized by purges] who gets the benefits?  [Party hierarchy].

There was more to the economy than that. I could say more (a lot more) but, based on past experience, I can't see this going anywhere useful so, with respect, I'm out of this one. I'll just say - for the 200,000,000th time - that Stalin committed atrocities. If there was some act of penance I could do, I'd do it but I really don't know what to do except try to be part of making a better world. So can we drop this? 

writer writer's picture

I'm thrilled that any future mention of capitalism will spell out the genocide, displacement and slavery it was founded on, as well as acknowledging the ongoing exploitation and environmental degradation on which it continues to depend, with only a lucky few enjoying most of the reward.

Hey, anybody else hear that [url=http://www.examiner.com/x-17299-Hernando-County-Political-Buzz-Examiner~... Bay could soon be evacuated[/url] "as FEMA prepares for what is now being called the worst oil disaster in the history of the world"?

epaulo13 epaulo13's picture

"Drop Dead Economics": The Financial Crisis in Greece and the European Union

The Wealthy Won’t Pay Their Taxes, So Labor Must Do So

by Michael Hudson

quote:
Financial lobbyists are using the Greek crisis as an object lesson to warn about the need to cut back public spending on Social Security and Medicare. This is the opposite of what the Greek demonstrators are demanding: to reverse the global tax shift off property and finance onto labor, and to give labor’s financial claims for retirement pensions priority over claims by the banks to get fully paid on hundreds of billions of dollars of recklessly bad loans recently reduced to junk status.

The Greek bailout should be thought of as a TARP for German and other European bankers and global currency speculators. Almost $1 trillion is being provided by governments (mainly Germany, at the cost of its own domestic spending) into a kind of escrow account for the Greek government to pay foreign bondholders who bought up these securities at plunging prices over the past few weeks. They will make a killing, as will buyers of hundreds of billions of dollars of credit-default swaps on the Greek government bonds, speculators in euro-swaps and other casino-capitalist gamblers. (Parties on the losing side of these swaps now will need to be bailed out as well, and so on ad infinitum.).....

http://www.globalresearch.ca/index.php?context=va&aid=19107

epaulo13 epaulo13's picture

"Drop Dead Economics"

quote:
Meanwhile, the financial sector is to be enriched by the translation of junk economics into international policy. Living in the short run is the financial sector¹s time frame ­ while distracting the attention of indebted populations from calculations that Wall Street understands quite well: the debts cannot be paid in the end.

But they can be paid in the short run, with promises to pay someday ­ as if any economies ever have been able to grow by imposing austerity! It is all junk economics, of course. But it buys time for the bankers to pay themselves yet more bonuses this year. By the time the financial system collapses, they presumably will have put their money into hard assets.

http://www.globalresearch.ca/index.php?context=va&aid=19107

thanks

mention of the oil reminded me of the Icelandic situation; there were some Norwegian and UK banks involved in speculating in Icelandic currency and interest rates, ruining its economy, while there was new oil to be had in the offshore trench where their oil industries were hoping to operate.

I wonder who the financiers are behind BP and how they or others manipulate exchanges to force governments to approve their exploitations.

maybe pipeline interests were speculating in Greece too.

epaulo13 epaulo13's picture

"Drop Dead Economics"

quote:
Greek labor is not yet so pessimistic as to give up the fight. What it recognizes that its American counterparts do not is that somebody will control the government. If labor – the demos – loses its spirit, power will be relinquished to foreign creditors to dictate public policy by default. And the more the bankers’ interest is served, the worse and more debt-burdened the economy will become. Their gain is bought at the price of domestic austerity. Scheduled payouts by Greek pension funds and government social spending programs must be to replenish German and other European bank capital.

http://www.globalresearch.ca/index.php?context=va&aid=19107

epaulo13 epaulo13's picture

..the implications of the "drop dead" article alarmed me. i would expect that canadians would come together and fight valiantly as the greek workers do today. but i'm not sure. i believe i know where my mp, libby davies is at but i'm not sure where the ndp stands. so i sent an email to libby and jack asking the question. i also sent a link, with quotes, of the "drop dead" piece. this is what i wrote. 

greetings...
..sooner or later what is happening in greece is coming to canada. the position so far of the social democratic governments in europe has supported shifting the debt created by the financial crisis onto people that had nothing to do with that creation.
..i know where the libs and the cons stand on this matter so i don't need to be educated on that. what i would like to know is where the federal ndp is on these matters. it would be good to have people in parliament that said no, in a strong way, to shifting this debt.
..i thank you in advance for your time.

Jacob Richter

thanks wrote:
"7. a very critical note: describing the period of the 1930's as an era, above all, of great "social prosperity" in the former Soviet Union without making reference to the Stalinist excesses and crimes and show trials, etc. , casts a dark cloud over this overwise interesting piece. We all know that capitalism was undergoing a profound crisis at the time but this hardly merits sweeping such crimes under the rug. Gah."

-from the earlier babble thread on Greek Austerity, a comment i was greatful for in a critique of a KKE article.

I find it very difficult to take the KKE seriously when they are so false regarding the USSR. 

Perhaps if the KKE hear criticism in this regard they can reexamine evidence from the region.

Otherwise they and their other messages are just written off.

SYRIZA is the other far-left political force in the Greek parliament, consisting of Trots, Maoists, left-soc-dems, Greens, etc.  Try their take.

Frustrated Mess Frustrated Mess's picture

thanks wrote:

mention of the oil reminded me of the Icelandic situation; there were some Norwegian and UK banks involved in speculating in Icelandic currency and interest rates, ruining its economy, while there was new oil to be had in the offshore trench where their oil industries were hoping to operate.

I wonder who the financiers are behind BP and how they or others manipulate exchanges to force governments to approve their exploitations.

maybe pipeline interests were speculating in Greece too.

Capitalists were speculating in both oil and Greece. Capitalism is a predatory ideology that reduces humans to mere commodities to be traded and disposed of like a Tim Hortons cup. Capitalism is responsible for crimes against humanity still being tabulated as it kills a half million children every single day. From its concentration camps in the mid-east, to its torture chambers spread throughout the globe, to the gulags it funds and maintains wherever humans resist, capitalism and its adherents make Stalin look a weak competitor for the title of monster. The genius of capitalism is that it represents a continuous and unbroken line of monsters to which the crimes can't be easily personally assigned leaving weak minded folk to place the evils of the ideology into memory holes whereas Stalin takes personal responsibiliy for his atrocities. I suppose that makes Stalin a good conservative. In any case capitalism is succeeding where Stalin never did dare to tread in placing the financial interests of a cabal of "investors" before all life on the planet. If Christians believe God created life, then surely that which systematically extinguishes life is the opposite of God--the antischrist. And that would be capitalism.

writer writer's picture

Amen.

RosaL

writer wrote:

Amen.

 

Yeah, that was good, Frustrated Mess. 

peterjcassidy peterjcassidy's picture

The "crisis" in Greece, while it has its own local dynamics, is part of the latest "crisis of  capitalism", Consider there are half a dozen or countries, demonized by the MSM as "PIGS" (Portugal, Iceland ,possibly  Ireland, Greece, Spain) who are considered in  serious trouble likely to collapse.  unless they get  their share of a trillion dollar bail out and adopt stern austerity measures. Yes we are now  considering the collapse of national governments, riots in the streets and troops called in- not just in Asia, not just in Africa, not just in South America- but in all these continents  and Europe too.    Greece has seen it, or variations of it before, the Nazi occupation and the resistance, the civil war between the "communists" and the  "monarchists" followed by  the return of the  monarchy, brief periods of bourgeois democracy and then, a  military coup.more struggle and now a left government burdened by previous corrupt and inefficient administrations. The people get th blame for the crisis  of a system created and managed by the incompetent and corrupt capitalists

 

NDPP

The People of Greece are Fighting For the Whole of Europe

http://democracynow.org/2010/5/11/the_people_of_greece_are_fighting

"Tariq Ali and Mark Weisbrot discuss Greece's economic crisis and Popular Uprising"

thanks

I will say that was very painful yesterday.  Emotionally particularly.

Help from others in prevention would be useful.

__

Today, from a comment underlying the CBC article on SEC ineptitude, the US Senate is AGREEING on an audit of the Fed.

There are some very encouraging quotes from the Senate debate at the Daily Senate Congressional Record:

http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?position=all&page=S3... and following pages:

"Sanders-Dodd modified amendment No. 3738 (to amendment No. 3739), to require the nonpartisan Government Accountability Office to conduct an independent audit of the Board of Governors of the Federal Reserve System that does not interfere with monetary policy, to let the American people know the names of the recipients of over $2,000,000,000,000 in taxpayer assistance from the Federal Reserve System"

"Audits of the Federal Reserve Board and Federal reserve banks shall not include unreleased transcripts or minutes of meetings of the Board of Governors or of the Federal Open Market Committee. To the extent that an audit deals with individual market actions, records related to such actions shall only be released by the Comptroller General after 180 days have elapsed following the effective date of such actions.’’

"the GAO cannot review many actions such as discount window lending—direct loans to financial institutions— open market operations and any other transactions made under the direction of the Federal Open Market Committee.  GAO also, under the clear terms of this amendment, cannot look into the Fed’s transactions with foreign governments"

It seems that the current Senate amendment is to get names evidencing conflict of interest in use of bailout money, but not details of transactions of what happened to the money after that.

The action was based on the fact that the Fed, as did Harper in the last few days, gave even more money because of the situation in Europe, but even Senators did not know what exactly was done: "I do not know enough about those recent deals and currency exchange swaps to comment on whether they are a good idea or a bad idea, or to comment a clear conclusion about the extent to which they put U.S. taxpayers at risk.But clearly they are a significant event. Clearly, there is significant action of the Fed. And clearly, they are a perfect and very recent example of why we need to look in detail at what the Fed is doing on an ongoing basis."

Let's see if Harper will let Canadians know who got the Bank of Canada's 200 billion dollar bailout in 2008, and who got yesterday's reported thirty billion.

But, beyond SEC or Senators' cries of 'we don't understand!', an audit naming a few names is not enough if the system allowing financial speculation remains in place (thanks to Tariq Ali at the Democracy Now link above for that reminder).  Senate and Congress will have to get rid of clauses in their 'reform' package which treat restrictions on speculative transactions as 'barriers to investment and trade'.  NAFTA and WTO regimes will have to be tackled.

thanks

and regarding FMs note, I see Stalin as one of the monsters in the unbroken line; he traded in existing currencies with existing western powers, using stolen resources and mass terror. 

_______

regarding the rest of the Democracy Now link, Weisbrot had some useful observations, but i disagree that derivatives gaming in national debt is not a large problem.  perhaps he was negating only a focus on Goldman Sachs.  all the players are a problem, and the system itself.

Fidel

[url=http://www.globalresearch.ca/index.php?context=va&aid=19107]"Drop Dead Economics": The Financial Crisis in Greece and the European Union[/url]  The Wealthy Won’t Pay Their Taxes, So Labor Must Do So

Quote:
Riddle: How are the Greek rioters like America’s Tea Party movement?

Answer: Both reject government being taken over by the financial oligarchy to shift the tax burden onto labor.

The difference is that the Tea Partiers have lost faith in government. This is just what the financial oligarchy wants, of course. Giving up hope of gaining electoral control to pursue a fair fiscal agenda, the Tea Partiers have abandoned the centuries-long fight for reform to make governments better by giving them the power to check predatory finance and wealth. Sliding to the right wing of the political spectrum and acting mainly out of frustration, they have succumbed a utopian desire simply to shrink government that they see acting adversely to their interests.

 

Snert Snert's picture

Quote:
Answer: Both reject government being taken over by the financial oligarchy to shift the tax burden onto labor.

 

Funny that the tea partiers only did so when a black man got elected. A few years ago, they were more than happy to support governments that shifted taxes onto the little guy and gave breaks to the big guy.

 

Similarly, I don't recall the Greeks rioting in the streets when the government and this "financial oligarchy" were helping Greece find new prosperity. Only when things crashed did it really seem to be a big problem. Heck, I doubt many current "tea partiers" were all that upset when they could suddenly buy a house or a speculation property with no money down, at unbelieveably low rates. Everything was EXCELLENT then.

Fidel

Ya I think they call it banking without representation, or something.

Fidel

thanks wrote:

and regarding FMs note, I see Stalin as one of the monsters in the unbroken line; he traded in existing currencies with existing western powers, using stolen resources and mass terror.

What if Stalin had not used slave labour and cheap labour? Would it have given Nazi Germany an unfair advantage in preparations for the war of annihilation against Soviet communism? The Soviets didn't have the same economic edge in the decade long preparations for western aggression against the revolution part II. None of IBM, or Standard oil of New Jersey, INCO, IG Farben, Ford, Studebaker, GM, Wall Street bankers and German industrialists were on the Soviet or Spanish Republican or Maoist side of things then.

Michael Hudson says a number of former Soviet countries have maintained their sovereign currencies and will decide what to do about the debt crises over the summer and autumn. Perhaps they will choose wisely.

epaulo13 epaulo13's picture

"Drop Dead Economics"

After Latvia’s parliament imposed austerity in December 2008, popular protest in January brought down the government (as a similar protest did in Iceland). But the result was merely another neoliberal “occupation regime” run on behalf of foreign banking interests. So what is unfolding is a Social War on a global scale – not the class war envisioned in the 19th century, but a war of finance against entire economies, against industry, real estate and governments as well as against labor. It is happening in the usual slow motion in which great historical transitions occur. But as in military conflicts, each battle seems frenetic and spurs wild zigzagging on the world’s stock and bond exchanges and currency markets.

http://www.globalresearch.ca/index.php?context=va&aid=19107

West Coast Greeny

There have been good points brought up on the nature of the austerity package. Maybe corporate profits could be taxed more (Greece is already increasing taxes on corporate profits, by the way), certainly that country could do something about going after wealthy tax dodgers. But in principle, I agree with Sven and Snert. Greece didn't lose their fiscal sovereignty because of the predatory nature of capitalism, or whatever. They lost their fiscal sovereignty because the governments they elected were incompetent, dishonest, and corrupt. If it comforts you, these governments were mostly conservative.

The KKE says that the peoples of Europe should rise up. They won't. They get it. They've witnessed the communist experiment, its repressiveness, its failures, and its ungodly apartment complexes first hand. They know that you don't have to get into the kind of hole Greece is in if you deal with your balance books competently and honestly.

Jacob Richter

Who said anything about insurrection? Class struggle and the very "predatory nature of capitalism" which you so deny is the more immediate issue here. Then again, I don't think liberals like you know what class struggle means.

Fidel

The truth is that they wanted Soviet socialism democratizing in a number of those countries not western style capitalism, and especially not US style capitalism. Western world oligarchs, HIID, USAID, etc helped their crooks in government and nomenklatura to steal the public good from under their feet. Perestroika was the largest theft of the commons(Marxian primitive accumulation) since enclosure era England.

Catchfire Catchfire's picture

“The People of Greece Are Fighting for the Whole of Europe”: Tariq Ali and Mark Weisbrot

Quote:

TARIQ ALI: Well, Amy, it’s exploded in Greece, very violently, as many could have predicted, because trade unions in Greece have remained strong. They feel that a lot is at stake, and they know that if these measures, which should never be called reforms—if these measures, anti-working-class measures, are pushed through by the government, their living standards of the average citizen of Greece will just go right down. They will suffer. And people are asking, in Greece and elsewhere, “How come we are being victimized? All the cuts in public spending affect us; they don’t affect the rich. And why are the bankers not being punished? Well, why is this system, the system created by neoliberalism, of deregulation, of actually legalizing financial speculation, why is this not being stopped?”

And we see in Germany, just last night, the ruling coalition suffered very heavy defeats in regional polls, and there’s pressure on Angela Merkel, the—Angela Merkel, the German chancellor, to resign, because she’s now lost a majority in the Senate, and they can’t push through their so-called reforms. And the Social Democrats, who are now in opposition, are saying that the financial system has to be thoroughly reformed. It’s the strongest statement from a Social Democrat in Europe I’ve heard. And it’s an indication that the system is in a complete mess. The reason the EU are putting in so much money is to reassure the markets and to prevent them from carrying out—from similar things happening in Spain and Portugal, which are on the brink.

So the Greeks really—the people fighting on the streets of Greece are fighting for the whole of Europe. And they held up a huge banner a few days ago on the Acropolis, this historic building in the center of Greece, saying, “Europe, join us.” And if the European workers’ movement were to join the Greeks, then we would have serious change.

ETA: I just realized that NDPP already posted this upthread. Whoops!

Snert Snert's picture

[url=http://www.theglobeandmail.com/report-on-business/more-woes-for-greek-ec... woes for Greek economy[/url]

 

Quote:
Images of flaming buildings and riots in Athens during last week's protests in debt-ridden Greece have taken an early toll on the country's vital tourism industry, hotel owners said Thursday.

West Coast Greeny

Jacob Richter wrote:

Who said anything about insurrection?

Nobody? I'm just quoting verbatum what was on the KKE banner unfurled outside the Acropolis.

Quote:
Class struggle and the very "predatory nature of capitalism" which you so deny is the more immediate issue here. Then again, I don't think liberals like you know what class struggle means.

I know what class struggle means.

No, the immediate issue is their sovereign debt - or to put it in simpler terms - where the fuck do I get $70Billion so I can pay public servants at all. 

Catchfire Catchfire's picture

West Coast Greeny wrote:
the immediate issue is their sovereign debt - or to put it in simpler terms - where the fuck do I get $70Billion so I can pay public servants at all.

From the Democracy Now interview above:

Quote:
MARK WEISBROT: [...] The economic theory which they’re using is called an internal devaluation, because they’re keeping the euro, and they want to keep the euro, and so what they’re trying to do is create enough unemployment so that wages and prices will fall, and then Greece can become competitive, even keeping the same nominal exchange rate with the euro. So this is a process that goes on quite a long time, and it’s very brutal, and it doesn’t usually work. In fact, the projections from the Greek government say that, you know, their debt is now 115 percent of GDP, and if they go through the program and it works, then two-and-a-half years from now they have a debt of 149 percent of GDP.

[...]

a lot of people have written about the fundamental problem of having these countries like Greece in the euro, because it’s an overvalued currency for them. And that is a problem. And, you know, that’s why, you know, they should really consider getting out of the euro as one option.

If the European Union and the IMF and the European Central Bank, which are the parties that they’re negotiating with, if they’re not willing to give them a program that allows them to grow out of it, but instead they’re telling them they have to shrink until some day the rest of the world economy will rescue them by, you know, providing demand for their exports or by a huge inflow of capital, which is not on the horizon, by the way—I mean, the European Union is only projected to grow by one percent over this year—so if, in fact, you know, they’re not willing to allow them to grow out of the recession, then the Greek government should just not accept it, and they could devalue their currency and renegotiate their debt, which is what Argentina did, for example, at the end of 2001, and it was very successful for them. The economy shrank for only one quarter, and then it grew by 63 percent over the next six years. So...there are alternatives

 

epaulo13 epaulo13's picture

The international significance of the Greek general strike

quote:
As in the US and other European countries, much of Greece’s state debt comes from the €28 billion bailout Athens voted for its banks. Now, while the Greek ruling class aims to extract €30 billion in yearly cuts from workers, governments throughout Europe and in the US are preparing to cut tens or hundreds of billions from their budgets.

This winter, the banks bid up interest rates on Greek debt, hoping to make large profits from interest payments while giving Papandreou an excuse for the social cuts he aimed to carry out. This plan has now backfired, however.

As workers protested the cuts and European powers clashed over the terms of a bailout, interest rates climbed so high that the banks for all practical purposes bankrupted Greece. Even if Greece adhered to the three-year, €110-billion European-IMF bailout, it would be shattered—by some estimates, the European-IMF cuts would collapse its economy by 30 percent. By then, however, it would owe even more than the roughly €300 billion it owes today.

http://www.wsws.org/articles/2010/may2010/pers-m10.shtml

Doug

When you borrow foreign money and get into a position where borrowing more isn't optional anymore, this is what happens.

West Coast Greeny

Catchfire wrote:

West Coast Greeny wrote:
the immediate issue is their sovereign debt - or to put it in simpler terms - where the fuck do I get $70Billion so I can pay public servants at all.

From the Democracy Now interview above:

Quote:
MARK WEISBROT: [...] The economic theory which they’re using is called an internal devaluation, because they’re keeping the euro, and they want to keep the euro, and so what they’re trying to do is create enough unemployment so that wages and prices will fall, and then Greece can become competitive, even keeping the same nominal exchange rate with the euro. So this is a process that goes on quite a long time, and it’s very brutal, and it doesn’t usually work. In fact, the projections from the Greek government say that, you know, their debt is now 115 percent of GDP, and if they go through the program and it works, then two-and-a-half years from now they have a debt of 149 percent of GDP.

[...]

a lot of people have written about the fundamental problem of having these countries like Greece in the euro, because it’s an overvalued currency for them. And that is a problem. And, you know, that’s why, you know, they should really consider getting out of the euro as one option.

If the European Union and the IMF and the European Central Bank, which are the parties that they’re negotiating with, if they’re not willing to give them a program that allows them to grow out of it, but instead they’re telling them they have to shrink until some day the rest of the world economy will rescue them by, you know, providing demand for their exports or by a huge inflow of capital, which is not on the horizon, by the way—I mean, the European Union is only projected to grow by one percent over this year—so if, in fact, you know, they’re not willing to allow them to grow out of the recession, then the Greek government should just not accept it, and they could devalue their currency and renegotiate their debt, which is what Argentina did, for example, at the end of 2001, and it was very successful for them. The economy shrank for only one quarter, and then it grew by 63 percent over the next six years. So...there are alternatives

 

Interesting. Thanks for the link. There are a couple of issues with that solution though.

First, it's actually not that easy for Greece to leave the Eurozone though. They actually need the consent of the majority of the EU to do so. The EU probably won't be thrilled to see their currencies devalued to the extent they would be if one of the member states defaulted. Hell, Germany would probably invade.

Second, if Greece left the Euro (a process that could take years), you could bet that the New Drachma would be quickly devalued. This would really have the same effect on the Greek people as these austerity measures, maybe a worse one.

Sven Sven's picture

West Coast Greeny wrote:

Second, if Greece left the Euro (a process that could take years), you could bet that the New Drachma would be quickly devalued. This would really have the same effect on the Greek people as these austerity measures, maybe a worse one.

Which is exactly why Greece cannot escape dealing with this problem.

The Greeks can't simply say, "We're not going to play this game anymore!" and then pretend that the problems will go away.  All alternatives present significant pain for the Greeks...and the Socialist PM and his party have concluded that the EU/IMF loans are the least painful of the various alternatives.

Jacob Richter

West Coast Greeny wrote:

Jacob Richter wrote:

Who said anything about insurrection?

Nobody? I'm just quoting verbatum what was on the KKE banner unfurled outside the Acropolis.

Quote:
Class struggle and the very "predatory nature of capitalism" which you so deny is the more immediate issue here. Then again, I don't think liberals like you know what class struggle means.

I know what class struggle means.

No, the immediate issue is their sovereign debt - or to put it in simpler terms - where the fuck do I get $70Billion so I can pay public servants at all. 

That is part of class struggle.  No group of capitalist powers is willing to perform a collective default on their sovereign debts (since default by a single country can be disastrous), screwing "the greedy bankers" and speculators to help their own respective populations, then enabling lesser capitalist countries to default.

epaulo13 epaulo13's picture

..as soon as you default everything becomes negotiable. not so if you accept what the bankers and speculators want. the issue is control.

epaulo13 epaulo13's picture

..this option was open to the greek government as well. it chose otherwise.

Venezuela Takes Steps to “Smash” Currency Speculation

Caracas, May 12, 2010 (venezuelanalysis.com) – Venezuela’s National Assembly approved, in the first round of discussion, a new reform to the Law against Illicit Exchange on Tuesday in order to curb speculation after the Bolivar currency fell further in the parallel market.

The reform, which still has to be approved in a second round of debate, would give the Central Bank of Venezuela (BCV) exclusive power to authorise the purchase and sale of foreign currencies.

It also aims to close a loophole that allows Venezuelan brokerage firms to buy and sell government debt, and thereby trade currency in the parallel foreign exchange market, by redefining currency trading to include transactions of bond denominated in foreign currency.

http://venezuelanalysis.com/news/5356

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